In recent times, government bodies of few major countries have made it clear that transactions related to cryptocurrencies and ICOs will have a bleak future in their area and companies who are investing in such campaigns are in for a major threat since their investments will be deemed illegal if they don’t act soon.
Despite such kind of official warnings issued by legal authorities of many countries, plenty of start-ups still are venturing into the cryptocurrency backed ICOs popularly known as Initial Coin Offerings. Here’s how they are doing this successfully:
Setting up Business in a Crypto-friendly nation
The startup companies found their peace by shifting their base country to the country where the citizens are allowed to trade in cryptocurrencies and ICOs and are slowly forming friendly laws for the traders/investors to thrive in their particular business
Registering the Companies where Crypto Trading is Legal
Few companies did a smart work by registering their trade activities related to digital trading in a country where trading in cryptocurrency and raising funds via ICO is legally allowed. Hence, even though their main line of business is based in India, their belief in the success of digital currency is so much that they registered a new company that might strictly deal in crypto related work and their line of business is also not threatened by any harsh laws that stop them any further.
Recently, the regulatory authority in India had issued an official statement which declared that all business or exchanges that are currently dealing with cryptocurrency should stop their dealings as early as possible and to make sure this is taken out seriously all the major Indian banks were asked to ban crypto related tradings. This created a lot of disturbance in the crypto community all around the world and soon enough the price of the legendary Bitcoin did fluctuate and hit rock bottom too. But the crypto lovers were swift enough to find an antidote to their ongoing issues and planned to either move out of the country or register their companies where legal trading is allowed so that no future blockages are entertained in their crypto journey.
A couple of startups are now focusing towards raising funds by promoting ICO which is an unregulated means of raising funds from prospective investors who believe that the coin that is being promoted will solve a certain ongoing problem that the world is currently facing. The funds are raised using the popular cryptocurrencies such as BTC and ETH etc.
ICOs are similar to IPOs where the potential investors who invest money or basically cryptocurrencies are allowed to swap their coins for the ICO token, which allows them to hold a share of the company which is offering the ICO.
In order to list an ICO in a different country, for example, Singapore, citizenship is not an important factor, the company investors can still operate from offshore location and promote their business in the overseas location which has crypto-friendly laws. As per reliable sources, few crypto related startups are also shifting their base or listing their companies in offshore location due to high taxation laws that attracts luxury tax that’s comparatively very high, which is pretty much understandable.
The most commonly asked question is well answered.